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Article
Publication date: 1 August 1997

Brian Snowdon and Howard R. Vane

An interview with Milton Friedman in 1996 ‐ presents his reflections on some of the important issues surrounding the evolution of, and currrent debates within, modern…

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Abstract

An interview with Milton Friedman in 1996 ‐ presents his reflections on some of the important issues surrounding the evolution of, and currrent debates within, modern macroeconomics. A world‐renowned economist and prolific author since the 1930s, Milton Friedman has had a considerable impact on macroeconomic theory and policy making. Associated mostly with monetarism and the efficacy of free markets, his work has ranged over a broader area ‐ microeconomics, methodology, consumption function, applied statistics, international economics, monetary theory, history and policy, business cycles and inflation. In the interview discusses Keynes’s General Theory, monetarism, new classical macroeconomics, methodology, economic policy, European union and the monetarist counter‐revolution.

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Journal of Economic Studies, vol. 24 no. 4
Type: Research Article
ISSN: 0144-3585

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Article
Publication date: 1 February 1977

JAMES TREVITHICK

We have in recent years witnessed a spectacular revival of a doctrine which most economists had presumed to be dead, buried and thoroughly discredited. This is a doctrine…

Abstract

We have in recent years witnessed a spectacular revival of a doctrine which most economists had presumed to be dead, buried and thoroughly discredited. This is a doctrine which came to be known as the Treasury View. In brief the Treasury View stated that all attempts to stimulate employment by means of bond‐financed budget deficits (what Keynes called “loan expenditure”) were doomed to ignominious failure. The grounds for this belief varied somewhat, but underlying it was the view that the successful sale of government debt on the capital market would deprive private investors of access to an equal quantity of funds with which they might otherwise have purchased capital equipment. Nor would matters be materially improved if the increased competition for “investible funds” raised the level of savings via a rise in the rate of interest, for the rise in savings would, by definition; be accompanied by an equal fall in consumption expenditure. In other words, a rise in one form of expenditure would be exactly offset by reductions in the other components of aggregate spending.

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Journal of Economic Studies, vol. 4 no. 2
Type: Research Article
ISSN: 0144-3585

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Article
Publication date: 4 October 2011

Branka Mraović

The purpose of this paper is to explore the interaction between the economic and political imperatives of new monetarism. The breakdown of the global derivatives markets…

Abstract

Purpose

The purpose of this paper is to explore the interaction between the economic and political imperatives of new monetarism. The breakdown of the global derivatives markets, which came into the spotlight during the 2008/2009 global debt crisis, brought up the issue of trust. The matter at hand is the loss of trust in investors' ability to make informed decisions, but trust in the self‐regulating capacity of open markets has also been seriously shaken.

Design/methodology/approach

Relying on Roche and McKee's analysis of the global financial crisis, the author emphasizes that new monetarism is not a new paradigm, but rather a result of economic circumstances. Although the growth of financial asset prices was indeed partly a result of the liberalization of financial markets, the decisive factor is to be found in the creation of new financial instruments. On the one hand, derivatives have drastically increased the “investment power” or “purchasing power” of money. However, on the other hand, derivatives are a form of under‐appreciated liquidity that creates bubble assets.

Findings

Over the last two decades, the value of global financial assets has grown much faster than the real economy in its background, which means that in the era of new monetarism, financial markets set the tone of the real economy. Consequently, in the eyes of investors, the crucial term becomes “liquidity”, rather than “real economy”. As disinflation multiplied the value of financial assets, central banks progressively lost control of money. Players in financial markets that had increasing trust in cheap money started to introduce new forms of money, which allowed them to create liquidity, independently of the central bank. It has been shown that the quantity and cost of money available for investment can be frozen up to a point where it threatens the global financial system.

Practical implications

Networks for promoting social responsibility of the corporate sector, which more and more tightly cover our small planet, wish to make transparent the connections between corporate leaders, politicians and organizations to which they are connected. Their members conduct research with the aim of making the invisible power of money visible.

Originality/value

New financial democracy in the post‐modern era presupposes financially literate citizens, which without a doubt presents a challenge for education systems, which will evidently have to incorporate a new, crucial form of literacy, in addition to linguistic, mathematical and computer literacy – financial literacy.

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Social Responsibility Journal, vol. 7 no. 4
Type: Research Article
ISSN: 1747-1117

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Article
Publication date: 1 July 1979

Monetarism has the same attraction for the Right as Marxism for the Left: purporting to offer a simple solution to economic problems, it relieves believers of the need to…

Abstract

Monetarism has the same attraction for the Right as Marxism for the Left: purporting to offer a simple solution to economic problems, it relieves believers of the need to grapple intellectually with the complexity of economic reality.

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Industrial Management, vol. 79 no. 7
Type: Research Article
ISSN: 0007-6929

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Article
Publication date: 1 February 2004

John Smithin

This paper is a review essay of Leeson, R. (Ed.), Keynes, Chicago and Friedman (2 volumes), Pickering and Chatto, London, 2003. These volumes contain a comprehensive…

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Abstract

This paper is a review essay of Leeson, R. (Ed.), Keynes, Chicago and Friedman (2 volumes), Pickering and Chatto, London, 2003. These volumes contain a comprehensive collection of previously published papers, and also some interesting new materials, relating to the controversy about the accuracy of Milton Friedman's depiction of the “oral tradition” in monetary economics at the University of Chicago in the 1930s and 1940s. As such, the work is a notable addition to the scholarly literature. The broader issue raised by this collection is the precise relationship between Friedman's “monetarism” and the so‐called “Keynesian economics” of the neoclassical synthesis, and specifically, whether there was any real difference between them.

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Journal of Economic Studies, vol. 31 no. 1
Type: Research Article
ISSN: 0144-3585

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Article
Publication date: 1 October 1979

Denis Healey once said that he would squeeze the rich until the pips squeaked.Now, in the different context of Tory economic policy and its effect on jobs and industrial…

Abstract

Denis Healey once said that he would squeeze the rich until the pips squeaked.Now, in the different context of Tory economic policy and its effect on jobs and industrial investment, Stanley Alderson argues that the monetary curbs have put Britain on a disaster course.

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Industrial Management, vol. 79 no. 10
Type: Research Article
ISSN: 0007-6929

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Book part
Publication date: 1 January 2009

Rupert Read

Abstract

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Special Edition: Financial Crisis - Environmental Crisis: What is the Link?
Type: Book
ISBN: 978-1-78052-670-6

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Article
Publication date: 1 January 1983

Anghel N. Rugina

Pantaleoni used to say that there are two categories of economists—those who can, in the sense of being able to produce original work, and those who cannot. A more…

Abstract

Pantaleoni used to say that there are two categories of economists—those who can, in the sense of being able to produce original work, and those who cannot. A more meaningful and more useful distinction can be made between those who reason about the given problems in terms of stable equilibrium (most of them classicists) and those who do their thinking in terms of unstable equilibrium (actually stable disequilibrium) and sheer disequilibrium (most of them modern and contemporary scientists).

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International Journal of Social Economics, vol. 10 no. 1
Type: Research Article
ISSN: 0306-8293

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Article
Publication date: 1 December 1999

David Floyd, Robert Willis and Andy Adcroft

The UK has often looked abroad in search of a successful approach to managing the economy, e.g. lessons were taken up in the 1960s from French planning, from worker…

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1397

Abstract

The UK has often looked abroad in search of a successful approach to managing the economy, e.g. lessons were taken up in the 1960s from French planning, from worker participation in Germany in the 1970s, from monetarism in the USA in the 1980s and, in the 1990s, from Japan and South East Asia, until the current crisis. Shows how economic policies from outside the UK have influenced the UK economy. Also questions whether now, in the late 1990s, there has been a change in direction and a situation has been reached whereby other countries in Europe and beyond are actually looking towards the UK for guidance in the field of economic policy making. Much was made of the benefits of UK economic policy making during the recent Blair Government’s presidency of the EU. Moreover, it needs to be questioned whether individual governments will, in future, have much influence on economic policy making, with the creation of a single currency. Draws upon evidence from countries including Spain, France and Germany and considers various theoretical explanations concerning globalisation and European integration; also questions whether the UK economic model will continue to prosper or whether, like its fashion equivalent, it comes and goes. The current weaknesses are considered.

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European Business Review, vol. 99 no. 6
Type: Research Article
ISSN: 0955-534X

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Article
Publication date: 1 January 2006

Brian Burkitt

This article attempts to unravel the ways in which New Labour's economic and social policies differ from those of previous Conservative and Labour administrations.

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1556

Abstract

Purpose

This article attempts to unravel the ways in which New Labour's economic and social policies differ from those of previous Conservative and Labour administrations.

Design/methodology/approach

The article analyses Treasury documents, which outline the philosophy underpinning the Government's measures.

Findings

Gordon Brown has adopted a third‐way strategy between Monetarism and Keynesianism, which seeks to maintain stability whilst adapting to shocks. It is based neither upon fixed rules nor complete flexibility, but upon constrained discretion, i.e. the belief that long‐term stability requires a comprehensive framework, which constrains policy to achieve sustainable goals, but provides discretion to respond to shocks. If policy‐makers possess a sufficiently credible commitment to overall stability, they can exercise discretion in response to shocks without damaging long‐run expectations.

Originality/value

Founded upon the concept of ‘constrained discretion, the paper argues that New Labour is neither abolishing nor extending the welfare state, but rather is changing its character. Further empirical research in particular sectors is indicated.

Details

International Journal of Social Economics, vol. 33 no. 1
Type: Research Article
ISSN: 0306-8293

Keywords

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